Sam Bankman-Fried, the founder of the collapsed cryptocurrency exchange FTX, has been ordered to jail after a federal judge in New York revoked his bail. This decision comes less than two months before the case was set to go to trial. Bankman-Fried, who is 31 years old, had been under house arrest at his parents’ home in Palo Alto, California since his arrest in December on fraud charges related to FTX’s implosion.
During the hearing, Judge Lewis A. Kaplan of Federal District Court in Manhattan decided to end Bankman-Fried’s house arrest after prosecutors argued that he had provided documents to the media in order to intimidate a witness in the case. This development is the latest twist in a saga that saw FTX, once a leading company in the cryptocurrency industry, file for bankruptcy following a run on deposits. Bankman-Fried went from being a prominent figure courted by politicians and celebrities to a criminal defendant potentially facing decades in prison.
Now, Bankman-Fried will have to prepare for trial from a jail cell. The dispute over his bail revolved around an article published in The New York Times last month that revealed private writings by Caroline Ellison, an executive in Bankman-Fried’s business empire and his former girlfriend. Ellison has pleaded guilty to fraud charges and agreed to cooperate with prosecutors investigating Bankman-Fried.
Prosecutors claimed that Bankman-Fried provided the documents to The Times to intimidate Ellison before his trial in October. They also pointed out that Bankman-Fried had conversations with other journalists, including Michael Lewis who is writing a book about FTX. Prior to requesting that Bankman-Fried’s bail be revoked, prosecutors had asked Judge Kaplan to impose a gag order preventing the FTX founder from speaking to the media before his trial.
Bankman-Fried’s lawyers argued that he was exercising his right to respond to media inquiries when he provided the documents to The Times and that he did not violate the terms of his bail. The New York Times, the Reporters Committee for the Freedom of the Press, and a documentarian making a film about Bankman-Fried all expressed concerns about a potential infringement of First Amendment rights in relation to the gag order.
Bankman-Fried was arrested in the Bahamas, where FTX was based, after the company imploded in November. He was then extradited to the United States and released on restrictive bail conditions, which included wearing an ankle monitor and being confined to his parents’ house. Since his release, he has repeatedly faced criticism from prosecutors for behavior that pushed the boundaries of what was allowed while awaiting trial.
In January, prosecutors presented evidence that Bankman-Fried had sent messages to a former FTX executive who could be a witness in the case. They also revealed that he had used a virtual private network (VPN) to access the internet. As a result, Judge Kaplan imposed tighter bail requirements, limiting his website access and preventing communication with former FTX employees. Visitors to his parents’ house were also prohibited from bringing phones or computers.
The article in The New York Times about Ellison included excerpts from private Google documents addressed to Bankman-Fried. During a court hearing on July 26, prosecutors argued that the article demonstrated Bankman-Fried’s intention to intimidate and discredit a key government witness. They claimed that no set of release conditions could guarantee the safety of the community, and that Bankman-Fried had shown a willingness to exploit the conditions of his release and improperly influence the trial.
In conclusion, Sam Bankman-Fried, the founder of FTX, has been ordered to jail after a federal judge revoked his bail. This decision comes in the midst of a high-profile case involving fraud charges related to FTX’s collapse. Bankman-Fried’s alleged actions involving the media and a key witness have led to further scrutiny and restrictions imposed on his pre-trial release.